I saw this tweet last night:
The White House is having early talks about a tax refund/dividend check from the trillions in revenue they plan to collect from sweeping tariffs, said former commerce secretary Wilbur Ross, who ate dinner with Trump, Bessent, Lutnick, Kennedy & others at Mar-a-Lago Friday
It was already crazy for some to claim that somehow we were going to get checks thanks to DOGE cuts, but now the White House is floating the idea of tax-refund checks from the “trillions” they think they’ll collect through sweeping tariffs. As a reminder, Peter Navarro is claiming that the administration will collect $600 billion annually thanks to the tariffs. That’s in addition to the $100 billion the administration will collect from the auto tariffs. #GOPforTaxIncreases
So much for all the messaging by some in the White House that these tariffs will be only temporary and are a means to negotiate. If Trump’s dinner partners at Mar-a-Lago are counting on this money to send checks to people, it tells me that they have long-term plans for them. Which one is it?
Either way, I wouldn’t count on this money yet or on its making Americans richer. Let’s start with the basics: Tariffs are taxes. Not on foreign countries but on American businesses and consumers. The government doesn’t magically get richer — it just shifts the bill to the rest of us. And it will be a massive increase, at a time when the economy is slowing down. In addition, if the tariffs are protectionist enough and discourage imports, the administration can kiss its magical-thinking revenue goodbye.
In fact, it will all likely become fiscally costly. When trading partners retaliate (already, Trump’s tariffs have led to a deal between China, South Korea, and Japan to retaliate together), American exporters will take the hit. They always do. The administration then bails out farmers, and taxpayers take the hit again. (By the way, I assume that this is what these refund checks are, a bailout to placate consumers aggravated by higher prices.)
But sure, let’s pretend there’s a bottomless pot of tariff gold waiting to be redistributed. Meanwhile, the federal debt is past $36 trillion, heading toward over $52 trillion and 118 percent of GDP in ten years (up from 100 percent today and assuming the tax cuts expire), interest costs are through the roof, and deficits are exploding.
These people in charge of our fiscal sanity are not serious, I’m afraid.